Ethical VS.

Unethical , and
Legal VS Illegal in Business

Students ,

Alupoaiei Iancu Stefan Andrei

Apostu Cristina-Maria

Arhip Georgiana

Badauta Iulia

Ethical Business Practices

 Business ethics are the philosophical core of any business and their outcome is crucial
for economic development. One has to recognize that the object of any business is to make
money in an honorable manner. And one must endeavor to remember that the object of life is
to do good.

Business ethics are more than moral values and principles that determine our conduct
in the business world. It refers to the commercial activities, either with other business houses
or with a single customer. They can be applied to all aspects of business; from generation of
an idea to its sale. Business uses the society for its resources and functioning, thereby
obligating it to the welfare of the society. While the objective of all business is to make
profits, it should contribute to the interest of the society by ensuring fair practices.

Ethical people are those who recognize the difference between right and wrong and
consistently strive to set an example of good conduct.

In a business setting, being ethical means applying principles of honesty and fairness
to relationships with coworkers and customers. Ethical individuals make an effort to treat
everyone with whom they come in contact as they would want to be treated themselves.

Ethical business practices that should be followed to build a honest reputation and
ensure smooth running of any organization :

Investors: Ensuring safety of their money and timely payment of interest.

Employees: Provision of fair opportunities in promotions and training, good
working environment and timely payment of salaries.
Customer: Complete information of the service and product should be made
available. Personal information of the customers should not be used for
personal gain.
Competition: Unscrupulous tactics, competitor bashing and wrong methods
should be avoided while handling competitors.
Government: Rules and regulations regarding taxes, duties, restrictive and
monopolistic trade practices and unlawful activities like corruption and bribing
should be adhered to.
Environment: Polluting industries should ensure compliance with the
government norms regarding air, water and noise pollution.

The importance of Ethics in Organizations

Leadership Ethics
The ethics that leaders in an organization use to manage employees
may have an effect on the morale and loyalty of workers. The code of
ethics leaders use determines discipline procedures and the acceptable
behavior for all workers in an organization. When leaders have high
ethical standards, it encourages workers in the organization to meet that
same level. Ethical leadership also enhances the companys reputation in
the financial market and community. A solid reputation for ethics and
integrity in the community may improve the companys business.

Employee Ethics
Ethical behavior among workers in an organization ensures that
employees complete work with honesty and integrity. Employees who use
ethics to guide their behavior adhere to employee policies and rules while
striving to meet the goals of the organization. Ethical employees also
meet standards for quality in their work, which can enhance the
companys reputation for quality products and service.

Ethical Organizational Culture

Leaders and employees adhering to a code of ethics create an
ethical organizational culture. The leaders of a business may create an
ethical culture by exhibiting the type of behavior they'd like to see in
employees. The organization can reinforce ethical behavior by rewarding
employees who exhibit the values and integrity that coincides with the
company code of ethics and disciplining those who make the wrong
choices.

Benefits to the Organization

A positive and healthy corporate culture improves the morale
among workers in the organization, which may increase productivity and
employee retention; this, in turn, has financial benefits for the
organization. Higher levels of productivity improve the efficiency in the
company, while increasing employee retention reduces the cost of
replacing employees.
 Unethical Business Practices

Unethical behavior in the workplace can be defined as any action that does not
conform with the standards of conduct established by the organization. Unethical behavior
can occur in the relationships between employees, in the way an employee goes about his
business or how he uses company resources. Unethical behavior can even break the law in
some situations.

Following are some of the activities that come under the ambit of unethical practice:

Resorting to dishonesty, trickery or deception.

Distortion of facts to mislead or confuse.
Manipulating people emotionally by exploiting their vulnerabilities.
Greed to amass excessive profit.
Creation of false documents to show increased profits.
Avoiding penalty or compensation for unlawful act.
Lack of transparency and resistance to investigation.
Harming the environment by exceeding the government prescribed norms for
pollution.
Invasion of privacy used as leverage, for obtaining personal or professional
gains.
Sexual discrimination

Also , theft at work comes in a variety of forms, and oftentimes employees do not
view it as unethical behavior, believing no one gets hurt by the action. Employees take home
office supplies, use business computers for personal tasks, pad expense accounts and abuse
sick time or allotted personal days. Though these may seem like minor infractions, they
eventually have an impact on the bottom line of the company, which then hurts all
employees. Theft also affects employee morale and is disheartening to those who choose to
behave ethically.

Vendor Relationships . Businesses that buy from and sell products to other
businesses are sometimes subject to unethical behavior. The practice of accepting gifts from a
vendor in exchange for increased purchasing is not only unethical, it may have legal
repercussions.
 Unethical behavior by companies, such as releasing pollutants into the air, can affect
cities, towns, waterways and masses of people. Though accidents can occur, the release of
harmful toxins into the environment due to lax safety standards, improper maintenance of
equipment or other preventable reasons is unethical.

Effects of a Lack of Ethics on a Business Environment

Legal Issues
In the United States, federal and state governments establish rules and procedures for
how a business should be run. Businesses that fail to follow federal and state guidelines often
face large fines and other penalties. Larger companies sometimes decide that breaking laws
and paying the fines involves lower costs than the financial gain made from breaking those
laws. However, consistently breaking laws can lead to costly legal battles that outweigh the
initial gain. Additionally, executives at companies who break laws and engage in unethical
behavior that leads to harmful practices for employees and customers could find themselves
facing criminal charges.

Employee Performance
A lack of ethics has a negative effect on employee performance. In some cases,
employees are so concerned with getting ahead and making money that they ignore
procedures and protocol. This can lead to additional paperwork and careless errors that result
in the task having to be completed again. Additionally, employees who feel acting ethically
and following the rules will not get them ahead in the business sometimes feel a lack of
motivation, which often leads to a decrease in performance.

Employee Relations
When a manager or head of a business exhibits a lack of ethical behavior, he faces
losing the respect of his employees. It is difficult to have a successful business without well-
respected leaders. A lack of ethical behavior can also cause tension among employees, with
some employees resenting those who do not play by the rules and still manage to get ahead.
Unethical behavior in the workplace also has the potential to lead to a lack of trust among
employees, which is detrimental to a business that relies on collaboration and a sense of
community.

Company Credibility
If a lack of ethics in a business becomes public knowledge, that business loses
credibility. While some businesses survive public knowledge of a lack of ethics through
reimaging and advertising campaigns, many lose a key customer base. Even if a business
recovers from news about its lack of ethics, it takes a lot of time and money to restore its
image and consumer confidence.

Preventing Unethical Behavior

Often a lack of ethics appears because of poor planning and faults elsewhere in the
business. To prevent unethical behavior, set realistic goals for employees. If employees are
expected to meet unreachable quotas and goals, they could engage in unethical behavior to
attempt to reach those goals. Consistently monitor employee performance. Employees left
unmonitored sometimes slack in their performance and take credit for completing tasks that
were left uncompleted. Properly train all employees. Untrained employees often cut corners
and make excuses for not completing work up to the standards the business requires

What Is the Difference Between Ethical Business

Practices & Legal Practices?
The main difference between ethical and legal business practices is that the law doesn't
fully address all ethical dilemmas that businesses face. Something might be legal, for
example, but unethical. Legal practices refer to processes and policies to abide by the law,
such as honesty and transparency in accounting. Ethical practices refer to efforts to meet
stakeholder expectations for business activities.

Essentially, legal business practices are enacted because of the inherent legal requirement
that the company behave or act in certain ways. Companies often have staff or contracted
lawyers to help ensure compliance with business and industry-related laws. Ethical practices
offer a bit more choice, technically. A business doesn't necessarily have to recycle plastics
and other materials unless local laws dictate it. However, many companies do practice
environmental recycling and reuse for ethical purposes and to meet public and customer
expectations.

LEGAL BUSINESS PRACTICES

The legal and regulatory environment plays a very crucial role in determining the success of
any businesses. The government imposes taxes among other regulatory measures to promote
economic growth and to cushion consumers from exploitation. Therefore, before establishing
or when running a business, it is imperative to understand the role of regional tax measures
and regulatory measures to determine how they affect your business.
 Understanding legal and regulatory measures also help you to adapt to your business
environment and to account for all your regional economic analysis.

Tax
Tax is one of the legal and regulatory factors that affect business. Tax codes may vary from
one country to the other and from one region in a country to the other. They can support a
business while other tax restricts certain business operations. The government can also
increase or reduce taxes to promote or control economic growth. Increase in tax can affect a
business negatively because it reduces consumer spending and vice versa.

It is also essential to note that tax come in form of income tax, individual income tax,
corporate income tax, gross receipts tax and fiscal balance tax among others. Therefore, as a
business person, it is wise to understand the kind of tax imposed in your location, population
and the criterion used to run your business smoothly and profitably.

Trade policies
Trade policies also affect business. They include tax policies, monetary policies, fiscal
policy, government policy, regulatory policy and property rights policies. These policies can
allow for business growth or prevent growth of business. For example trade policies can
prevent free trade in a specific area. Establishing a business under strict trade policies can
mean trading in losses.

Politics
Politics can affect a business a great deal. This is form of government where political
environment determines whether a business will be stable or not. A stable political
environment builds investor confidence and boosts the growth of a business.

It is also essential to note that parliament can exert pressure on the government to allow
for establishment of certain businesses and closure of others. As a business person, it is
therefore, imperative to keep in mind the role of government in creating a stable political
environment.

A good government does not allow for politics to affect business. Instead it creates rules
and regulations that cushions businesses from political interferences.

Whats more, there are governments that encourage diplomatic events that promote growth
of business for the benefit of its people. Such a government creates a good business
environment thus, allowing for increased productivity and profitability.

Economic policy
Economic policy of the government also affects business. It is a legal and regulatory factor
that helps to promote economic growth in a country. With favorable economic policy, a
business can grow enormously without any problem. However, a bad economic policy that
restricts businesses and free trade cripples much business.

Other legal and regulatory factory includes high costs of business operations to prevent
establishment of certain business. Therefore, before running a business, it is important to
consider legal and regulatory factors in your country or location. This will enable you to
operate a successful business.

UNFAIR BUSINESS PRACTICES

Running a thriving and successful business isnt easy especially since other companies
would fight tooth and nail just to get a leg up in the competition. The more successful your
business is, the more money you have so its no surprise why some companies would resort
to unfair business practices just to get ahead.

Consumers and even other business owners who are victimized by such practices can avail
of appropriate relief by undergoing an unfair business practices litigation. But before one can
file a case, it would be best to understand what constitutes unfair business practices after
all, there is no case if there is no crime.

So here is a rundown of unfair business practices:

As it is called unfair business practices, it generally covers acts of fraud, misrepresentation,

or oppressive and unethical practices committed by businesses against consumers or other
businesses.

The definition of unfair business practices is broad as most courts refuse to narrowly define
what constitutes an "unfair business practice in the interest of justice. However, it has been
held that unfair business practices include the following acts:

- Deceptive, untrue or misleading advertising

- Conspiracy to fix market prices
- Monopolization of a particular market
- Price discrimination
- Conspiracy to allocate markets or customers

California specifically has a law that prohibits unfair business practices. Found under
Section 17200 of the Business and Professions Code, Unfair Competition Law (UCL) allows
public prosecutors and private citizens to file lawsuits against companies who commit unfair
business practices against their competitors. In the late 1970s, the law was expanded to
protect consumers from any unlawful, unfair or fraudulent business act or practice which
would include unfair, deceptive, untrue or misleading advertising
 Further under this law, even without a client, any can lawyer sue a business for an
alleged unfair business practice even if it has been investigated or remedied by the district
attorney or a regulatory agency.

Whether you are a consumer or a business owner affected by a companys unfair

business practices, you have the right to seek relief by filing a case in court. If your case
wins, you may be awarded compensatory damages, punitive damages, and even attorneys
fees.